Cyclicals lead Wall Street higher; Dow, S&P end at records

US stocks rose today, with both the Dow and S&P 500 ending at records, as data pointed to improving conditions in the US services sector, boosting cyclical stocks.

Both the Dow and S&P also ticked to intraday records in a quiet session, with many traders looking ahead to tomorrow's key meeting of the European Central Bank.

Cyclical stocks, tied to the pace of economic growth, led on the day, with industrials, materials and energy all up more than 1 percent. Telecom, utilities and consumer staples declined; all are viewed as defensive plays.

The rise in energy came alongside a 0.8 percent rise in the price of crude oil. While the sector rose for a third straight day - up 3.2 percent over that period - it is the only industry group to be negative for 2014.

Cimarex Energy was one of the S&P 500's top gainers, up 5.1 percent at $108.17. Diamond Offshore rose 3.6 percent to $31.44.

The Dow Jones industrial average rose 33.07 points, or 0.18 percent, to 17,912.62, the S&P 500 gained 7.78 points, or 0.38 percent, to 2,074.33 and the Nasdaq Composite added 18.66 points, or 0.39 percent, to 4,774.47.

Across the Atlantic, European stocks rose today, led by shares in Greece, Italy and Spain, as investors bet the European Central Bank would signal further economic stimulus at a policy meeting tomorrow.

Investors wagered that ECB President Mario Draghi would open the door to the purchase of sovereign bonds at his press conference, traders said.

Greece's ATG, Spain's Ibex and Italy's FTSE MIB were the best performing indexes in Europe, rising between 1 percent and 1.7 percent, led by heavyweight banks, which have sizeable holdings of sovereign debt.

Italian yields fell below 2 percent for the first time, with Spanish equivalents hitting a record low of 1.81 percent. The euro tumbled to a 27-month low against the dollar.

The FTSEurofirst 300 index of top European shares closed up 0.5 percent at 1,399.97 points.

Nordic telecoms operator surged after Norway's Telenor and Sweden's TeliaSonera agreed to merge their Danish operations, in a deal that is expected to ease cut-throat price competition in the country.

Shares in Germans sportswear company Adidas AG and food retailer Metro featured among the top losers, hurt by worries over their exposure to Russia as the rouble continued its slide.

Meanwhile, Japan's Nikkei share average climbed for a fourth day as the dollar's rise to fresh seven-year highs against the yen supported sentiment, though gains were trimmed in late trade due to signs that the market is overheated.

The Nikkei 225 ended 0.3 percent up at 17,720.43, the highest closing level since July 2007. It rose to a high of 17,881.76 earlier.

Traders said there are signs that Japanese shares are overheated, with the toraku ratio, or up-down ratio, rising above 142. A level above 120 signals an overbought market.

Bucking the broader market, Otsuka Holdings tumbled 5 percent on news that it will buy a US drugmaker for about $3.5 billion.